Japan eyes switch for the yen

Monday 22 October 2001 23:00 BST

STRUGGLING to convert trillions of yen into pounds could soon become a thing of the past under plans being considered to redenominate the Japanese currency. Economics Minister Heizo Takenaka said today that redenominating the yen was an 'important option' as part of the Government's structural reforms.

The most likely option would be making 100 existing yen worth one new yen, bringing its value more in line with the dollar and the euro. So while one pound is currently worth about 175 yen, it would be worth 1.75 yen under the new system.

'Reforms mean bringing changes and making new history for Japan, so it would be meaningful from that standpoint,' Takenaka said. 'I'm not saying we can do it tomorrow, but there is room to discuss it as structural reforms progress.' He added that the time was ripe for a redenomination as Japan's deflationary environment reduced the risk of retailers rounding up prices to the nearest yen on conversion.